Venezuela's Guaido to warn Repsol of legal risks in trading with PDVSA

By Brian Scheid, Silvia Struthers / Platts

WASHINGTON
Petroleumworld 02 07 2019

Venezuelan opposition leader Juan Guaido will warn Spanish oil company Repsol of the legal risks of trading oil and products with Venezuelan state-owned company PDVSA, sources close to Guaido said Wednesday.

The warning falls in line with the Trump administration's intention in sanctioning PDVSA: to deprive President Nicolas Maduro's regime of all petroleum revenues, not just those from US buyers of Venezuelan oil, sources said.

While the Trump administration has not issued secondary sanctions, explicitly prohibiting oil and product trade between PDVSA and foreign companies, sources said the US Treasury Department wants to heighten the potential risk of any deal with PDVSA.

Treasury designed its Venezuela sanctions in a way that foreign companies would be reluctant to buy any additional crude from PDVSA, sources said. This was aimed at limiting the "fungibility" of the roughly 500,000 b/d of Venezuelan crude that US refiners are expected to no longer buy due the sanctions, one source said.

The Trump administration wants to make sure that PDVSA cannot easily divert crude that would have been shipped to the US to an alternative market, this source said.

On January 28, the Trump administration unveiled sanctions on PDVSA, which served as a de facto ban on US crude imports of Venezuelan oil and an immediate ban on US exports of diluent to Venezuela. The new sanctions require any payment for crude from PDVSA to be deposited into blocked accounts within the US.

The funds would ultimately be transferred to a new Venezuelan government, led on an interim basis by Guaido, if and when Maduro relinquishes power. The US last month formally recognized Guaido as Venezuela's legitimate president.

On Friday, Treasury gave non-US companies three months to wind down transactions with PDVSA that involve the US financial system, essentially prohibiting sales of PDVSA crude and products in US dollars.

Repsol is sending to Venezuela two shipments of 95 RON gasoline, according market sources. Repsol has chartered two vessels for Venezuela delivery in mid-February, S&P Global Platts shipping data shows.

PDVSA was not available for comment Wednesday, while a Repsol spokeswoman declined to comment.

Repsol's president, Antonio Brufau, quoted in Spain's El Pais newspaper, said Repsol "has been 20 years in Venezuela and I hope that extends to at least 20 more years. Be it one government of the other, what we want is always the best for the Venezuelan people," he said.

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